New York Markets After Hours

Lexmark declares initial 25-cent dividend

DrewFitzGerald

Lexmark International Inc.
LXK, +0.00%
said Thursday its board of directors has approved a regular quarterly cash dividend program, joining a growing list of companies that have launched or stepped up such payout programs in an effort to woo investors.

Chief Executive Paul Rooke said the move reflects the company's confidence in its future as well as its commitment to shareholders. The initial 25-cent dividend will cost the company about $79 million a year.

"With Lexmark's strong liquidity position and long history of solid cash generation, we feel confident that we can continue to pursue acquisitions to support the growth of the company while returning excess cash to our shareholders via the initiation of a quarterly dividend and through our share repurchase program," Rooke said.

The company said it had repurchased $125 million worth of its shares during the third quarter, and it expects to buy back the same amount in the fourth quarter.

The company's recent deals have included an agreement to buy Netherlands-based Pallas Athena for $50.2 million in cash, a move that would give Lexmark more offerings in management software and greater exposure to global sales

Lexmark and its peers have been placing a heavier focus on providing so-called managed print services to help offset headwinds in traditional hardware and supply businesses.

Shares were recently up 1.2% at $31.80 after hours Thursday. The stock was off 18% over the past year as of the close.

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